All three citizen members of Grand Traverse County’s pension advisory board resigned Monday, citing frustration that their recommendations “appear to be ignored” by county commissioners and concern the county will seek to bond its pension debt, a path vehemently opposed by advisory members.

Board members Christopher Radu, Robert Zimmerman and Michael Gillman sent a joint statement to County Administrator Tom Menzel early Monday morning tendering their resignation. The three members had served on the advisory board since August, part of a seven-member committee tasked with evaluating the county’s estimated $60-million plus in pension debt and providing recommendations for addressing it.

At an April 12 study session, advisory members presented a detailed report outlining their recommendations. Proposed solutions included extending the county’s amortization (repayment) schedule with the Municipal Employees’ Retirement System (MERS), establishing irrevocable trusts to more conservatively invest county funds, and pursuing a dedicated pension millage to pay down the debt. The one option members strongly cautioned against was bonding to pay for retirement costs, citing concerns it could add millions in interest costs to the county's bottom line and ultimately put the county – and taxpayers – in even deeper debt in the long run.

“The citizen members of the board unanimously expressed a lack of support for bonding and do not recommend issuing long-term securities to fund the pension plan under any circumstance,” the advisory group wrote to county commissioners.

But multiple commissioners expressed interest in bonding at the study session and signaled their intention to further explore the option, including Commissioners Tom Mair and Cheryl Gore Follette. “I’m enthusiastic about doing more research, and I don’t want to dismiss bonds,” Mair said at the meeting. “I think it’s much too early to do that, and I have not reached any kind of convincing stage that it should be dismissed just because the pension advisory board said so.”

According to Menzel, further discussion of pursuing bonding has been added to the commission’s May 10 agenda, as well as – at the request of Mair – possible discussion of dissolving the pension advisory board.

While Gillman tells The Ticker he was unaware the possible dissolution of the advisory board would be an agenda item and that it did not factor into his decision to resign, he said advisory members were “disappointed” in the commission’s response to their recommendations.

“It was pretty clear the thrust was toward bonds, and we unanimously and strongly said that was not a cost-effective alternative,” Gillman says. “We were volunteers who made recommendations in good faith. None of us sell bonds or have any financial stake in the game…so naturally we were disappointed that the option that carries more long-term costs was the one getting all the attention.” Noting that he considers bonding to be another version of the county “kicking the can down the road,” Gillman adds: “The bottom line is taxpayers will pay this debt – either through bonding with extra costs, a millage, or drastically cutting services. You can’t wish away a $60 or $70 million debt.”

Without the three citizen representatives, the remaining four pension advisory members now consist of all county officials and staff. Menzel says he will gauge commissioners’ interest in either dissolving or continuing the advisory board to determine whether to seek out new citizen volunteers to serve on the committee.

“I was disappointed (in the resignations), because those members had the right financial profiles, they were doing a very good job and they were acting independently, which is what we need,” says Menzel. “There’s no reason to go out and try to get volunteers for a board commissioners are considering dissolving, so we're going to have to clarify what they want at that (May 10) meeting.”

In other county news…
County commissioners will get an update on the Commission on Aging (COA) at their regular 5:30pm meeting Wednesday and will host a special meeting Thursday at 5:30pm to meet for the first time with an administrative search firm assisting the board in hiring a replacement for Menzel, who is leaving at the end of 2017.

Deputy Administrator Jennifer DeHaan will give commissioners an overview Wednesday of COA operations and recent processes that have been implemented to address technology, staffing and Health Insurance Portability and Accountability Act (HIPAA) needs in the department. DeHaan also says she’ll take any questions from commissioners about recently hired COA Director Mary Haverty, who is taking a 30-day leave of absence beginning next Monday.

Haverty, who is addressing a family medical emergency, initially sent her resignation to the county last week, but Menzel refused to accept it. He says Haverty has been excelling in her new role and that he wanted to offer her time to consider her options. Haverty has agreed to a 30-day leave of absence and will be in communication with administrators and staff and working on several COA projects during that period, according to Menzel.

Commissioners will publicly meet Thursday with Jaymes Vettraino of GovHR USA, an executive search firm hired by commissioners to help find Menzel’s replacement. According to a memo from Vettraino, the goal of the meeting “is to present the steps and timeline for the county administrator search process,” and to gather feedback from commissioners and the public “regarding the background and qualities they view as most important for the next county administrator.” That information will be used to inform the next phase of the search process, including recruitment brochure development, advertising, candidate recruitment and outreach.